Loans for buying cryptocurrency are today banned by one of the nation's biggest mutual banks and affiliates amid concerns the highly speculative and volatile billion-dollar market is not in its members "best interests".

Teachers Mutual Bank, UniBank and Firefighters' Mutual Bank on Monday announced that they will "not lend when the purpose involves cryptocurrency", the toughest measure to be taken by an Australian lender in the high profile sector.

Other lenders, both locally and overseas, have imposed bans on the use of credit cards to buy cryptocurrencies, limited the use of credit cards or refused to use income from cryptocurrenices as security for a loan.

Steve James, Teachers Mutual chief executive, said its ban was "a proactive, responsible lending measure" rather than responding to a surge in borrowing applications from cryptocurrency investors.

"Due to the highly speculative nature of cryptocurrency, we believe it is not in our members' best interests to loan for investing for these purposes," Mr James said.

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"We believe this is a prudent course of action for the bank and our members."

The Australian Securities and Investments Commission warns most virtual currency exchange platforms are unregulated and that users "may not be protected or have any legal recourse if the platform fails, or is hacked".

Other major lenders claim they will not ban or block investors from buying cryptocurrencies but that their transactions will be monitors.

Commonwealth Bank of Australia, the nation's largest, recently stopped customers from buying bitcoin on credit cards. It had previously stopped investors from its using personal loans for cryptocurrency investments.

It followed bans on credit card purchases of Bitcoin and other cryptocurrencies by major overseas' banks such as JP Morgan Chase, Bank of America and Citigroup, in response to extreme price volatility, lack of transparency and feverish speculation.

Other leading Australian banks, such as Westpac Group, said income from cryptocurrencies is not considered an acceptable form of income for lending but it "can be included as an asset as part of our home loan assessment processes, if declared by a customer".

National Australia Bank said it monitors customers and will act on a case-by-case basis.

Cryptocurrency is a very recent – and fast growing – market, and it's an unregulated currency," a spokesman said.

"We take the protection of our customer information and accounts extremely seriously, and so some card transactions may not be process as we aim to reduce this risk for our customers."